TSX gains for third day as financials rebound

·2 min read
A Toronto Stock Exchange sign adorns a doorway at the Exchange Tower building in Toronto

By Fergal Smith

TORONTO (Reuters) - Canada's main stock index rose to a one-week high on Thursday, helped by gains for the energy and materials sectors as well as a rebound in financials after positive earnings from some large domestic banks.

The Toronto Stock Exchange's S&P/TSX composite index ended up 150.96 points, or 0.75%, at 20,172.34, its third straight day of gains and its highest closing level since Aug 18.

The index has rebounded 11% from its July trough.

"The TSX, it's like a boxer that goes down and comes right back up," said Barry Schwartz, portfolio manager at Baskin Financial Services.

"Just when you think commodity prices are going to roll over and the growth names of the Nasdaq and the S&P are going to dominate, the TSX says 'no way buddy ... we're still in charge'."

Resource shares account for 29% of the TSX's market capitalization, while the index has a much lower weighting in technology than major U.S. benchmark the S&P 500.

The materials group, which includes precious and base metals miners and fertilizer companies, added 1.1% as gold and copper prices rose. Energy ended 0.6% higher.

Toronto-Dominion Bank and Canadian Imperial Bank of Commerce posted better-than-expected third-quarter profits as lending grew strongly.

That helped lift the financials group by 0.9% after it was pressured earlier in the week by some disappointing bank earnings reports.

Investors awaited a speech on Friday by Federal Reserve Chair Jerome Powell for clues on how aggressive the central bank may need to be as it raises interest rates to battle inflation.

Both the Fed and the Bank of Canada are expected to tighten further in September.

"The real concern will be what happens with interest rates after September," Schwartz said.

(Reporting by Fergal Smith; Additional reporting by Aniruddha Ghosh in Bengaluru; Editing by Sriraj Kalluvila, Shailesh Kuber and Sandra Maler)